The UK-based Games Workshop Group PLC (GB:GAW) today announced an agreement with Amazon.com, Inc. (NASDAQ:AMZN), to transform its Warhammer 40,000 game into digital entertainment. Games Workshop shares experienced a gain of 16% when the deal was initially announced in December 2022. The stock was up 1.28% today as of writing.
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Building on its Flagship Franchise
Warhammer 40,000 is a miniature wargame produced by the company and is the most popular wargame in the world. Through this deal, Games Workshop seeks to build upon its flagship franchise, extending its reach to a broader audience.
As per the terms of the agreement, Games Workshop has granted Amazon exclusive rights to adapt its Warhammer 40,000 game into films and television series. It also provides the option to license equivalent rights in the overall Warhammer fantasy universe after the release of the first production. The two companies will jointly decide on the creative aspects of this series for around 12 months. The agreement is subject to the approval of both parties on the creative guidelines.
Analysts’ Reactions
Analysts reacted favorably to the announcement and expect it to pave the way for more growth for Games Workshop. UK-based investment bank Peel Hunt views the deal as a “game changer” for the company.
According to analysts at Hargreaves Lansdown (HL), the company is poised to gain from Amazon’s extensive reach and substantial financial resources. HL further highlighted that more than half of British households have an Amazon Prime account, which would also benefit Games Workshop.
Is Games Workshop a Buy or Sell Stock?
According to TipRanks, GAW stock has a Moderate Buy consensus rating based on one Buy recommendation from Jefferies analyst Andrew Wade. He confirmed his Buy rating on the stock today after the announcement.
Wade’s share price target for Games Workshop is 8,700p, which is 12.3% lower than the current trading level.
